The case against cheap

While discounting can be healthy part of the strategy needed to survive the recession, according to a new study by Nielson, repositioning your brand to include value-based messages is not effective.

In a review of TV ad recall, Nielsen IAG found that value-message and recession-themed ads did not breakthrough TV ad clutter at higher rates than ordinary ads.

Brands that include value-for-money components in their brand narrative like Wal-Mart, Top Shop and LG will continue to do well due to down shifting and cautious customers. However, if your brand does not already include an emphasis on value-for-money notions, now is not the time time to begin introducing such ideas. Likewise, be cautious about the amount of discounting done and the contracts arranged with distributors. Leonard Lodish has written one of my favourite articles on the subject for Harvard Business Review back in 2007.

The case for good.

Instead, marketers should use this time to deepen their strategic positioning taking into account long-term shifts in society and markets for adding meaning to their brands. This time should be used to understand social media and how your brand can become more relevant to the issues society cares about. Unlike the economic downturn, creating more civil brands is not a cyclical trend, it is a long-term shift in our marketing reality.

The Edelman Trust Barometer finds that customers express a preference of civil and trusted brands – even during a recession. Over half of people surveyed indicate that they would pay a premium for these brands.

Since economic indicators are once again on the climb, this is the last call for many companies to consider the social dimension of their brands before getting back to business and usual and having to defend themselves from challenger brands who have been using this time to strategise and create new threats for market leaders for the past year.